Sin Tax, Zain & KCB

As usual, this year’s Kenya budget reading will not miss a dose of ‘sin tax’ for smokers and beer lovers. How effective these ‘sin taxes’ are is still a matter of contention, but this Mercatus Centre policy paper discourages them. In summary it says:

- Sin taxes are the result of anticompetitive behavior rather than true public-interest concerns. Most of them are used by industry leaders to fight back at their competitors (EABL, Keroche, tax stamps)
- Sin taxes are not used for their intended purpose and consumer of the taxes product don’t have control over the raised funds (which ends up funding political agendas anyway)
- The weight of sin taxes fall disproportionately on the poor
- Consumers of sin products are usually not responsive to increase in prices and may only substitute the product for a lethal alternative – defeating the objective
- Then there is the issue of same products from neighboring countries finding their way into the market albeit illegally.
- The effectiveness of ‘sin tax’ is thus trivial and a total failure (it even feeds immorality!)

No more Zain (Again!)

Zain Group is reported to be looking to sell its African unit, Celtel International. It’s said that Zain has been approached with a USD12 billion deal to sell Celtel to an unnamed French company. Zain has also received inquiries from firms in India and China. And still on Zain, its Zap money transfer service has been approved in Uganda and will be now be operational across East Africa.

Another first from KCB

KCB has announced a tender for an internet acquiring gateway, which according to @moseskemibaro is an indication that the bank would be offering an e-commece services platform locally. Following the passing of the ICT bill into law earlier this year e-commerce is now easier in Kenya and KCB may be the first to launch it. (ok let me not indulge more lest I become a ‘corporate cheerer’)